-The expansion of the plant to treat a total of 50Ml/day is over half way complete and
remains on track for full production in early 2014.

-The Anglo American continues to partner with other major players in the mining industry on
projects that will replicate the success of the eMalahleni Water Reclamation Project.

- The Minister of the Department of Water Affairs signed up to the Water Resources Group 2030
initiative together with the World Economic Forum, Coca-Cola, Eskom, Nestle, South African Breweries,
Sasol and others. The minister has set up a Strategic Water Partnership Network, with number of task
teams, to engage with the private sector and identify key projects that will support the
implementation of government’s water strategies and deliver on overall water security for South
Africa. Anglo American is working with Eskom on the Effluent Task Team to identify and replicate the
best practice water solutions that have been demonstrated by the private companies. Read more about
this
here.

-Water Strategy Implementation: Water stewardship is a vital input to Anglo American’s
operations and the security of its supply is of strategic importance both to the company and the
communities and countries in which it operates. The threat posed by climate change is also requiring the company to look at new
approaches to managing water in its operations. Read more about the strategy here.

-In 2011 nearly 70%
of AngloAmerican's operational water requirements were met by recycling or
re-using water and continue to work on new projects that will further improve this in the years to
come.

eMalahleni is a municipality of 510,000 people in a water-stressed region of north-eastern South
Africa. It is one of the fastest growing urban areas in the country, and has faced considerable
difficulties in meeting increasing demand for drinking water.

The city lies within the Olifants River Catchment – one of the regions in which Anglo American
has also been working with internationally recognised research institutions to develop long-term
climate models. The results, projected up to 2050, suggest that there is potential for a reduction in
mean annual rainfall in this area. Water shortages - or flooding as a result of extreme rainfall
events - could have serious implications for one of the most economically dynamic areas of South
Africa.

Anglo American’s Thermal Coal workings in the area around eMalahleni, however, contain
approximately 140,000 megalitres (Ml) of water - a figure that is rising by over 25 Ml a day.

Too little water on the surface is a problem for communities. Too much water underground is no less
of a problem for a mining company.

So Anglo American’s Thermal Coal invested a decade of research and development into mine water
treatment technology. This was aligned with the central government’s mine closure and
rehabilitation strategy, and the employment, development and environmental requirements of local
authorities. The research involved a partnership with South Africa’s power utility, Eskom, and
all of the major mining houses in the Highveld coalfields.

Anglo American subsequently established the eMalahleni Water Reclamation Scheme to treat the water
from its local operations, and that from a nearby, disused mine owned by another mining company. The
scheme was commissioned in 2007, and Anglo American put in place the infrastructure needed to deliver
the treated water directly into the municipality’s system.

The scheme treats mine water from current active mining operations. But it will remain in operation
well beyond the conclusion of active mining, to sustainably manage environmental needs and make
drinking water available to the local community into the future.

Mitigation and/or Adaptation

The city of eMalahleni is licensed to take 75 Ml of water a day from the local Witbank Dam. However,
it needs, and abstracts, 120 Ml a day, which has a negative impact on communities downstream of the
city. By 2030, the municipality’s water demand is forecast to be 50% higher at 180 Ml/day.

The Anglo American reclamation plant currently treats 30 Ml a day. Some of this is used in our own
mining operations, but the bulk of it supplies 12% of the city’s daily water need. In July
2011, the company approved investment to increase treatment capacity to 50 Ml a day, and this second
phase should be operational before the end of 2013.

The second phase has been designed to manage water from five coal mines, some of which have already
reached the end of their life. This includes mines owned by a competitor mining company. Anglo
American is moving beyond seeking solutions purely for its own mines, and is looking at a holistic
way of dealing with the water problems of the entire region.

The reclamation plant provides flexibility for the eMalahleni community and a degree of water
security as it seeks to address long-term climate adaptation risks from altered precipitation.

To date the water reclamation plant has treated 30 billion litres and supplied 22 billion litres to
the eMalahleni Local Municipality.But as part of its holistic examination of water in the region,
Anglo American has been working with internationally recognised research institutions to develop
long-term climate models for the Olifants River Catchment – within which the city lies.
The results, projected up to 2050, suggest that there is potential for a reduction in mean annual
rainfall in this area, highlighting the importance of prudent water management in the catchment.

Social Benefits

The construction of the plant created almost 700 temporary jobs, two-thirds of which were filled by
people from the local community. It now has 57 permanent employees - almost all of whom are local.

The plant wants to be a zero waste facility. A daily by-product of the water reclamation is 200
tonnes of gypsum-based solids, and this has been successfully used to make bricks. So far, 66
affordable homes have been built from the gypsum waste for employees and it is hoped that it will
soon be expanded to a total of 300 residential units. In addition, it offers an opportunity to
further stimulate local employment through the establishment of a community-based enterprise that
will manufacture and distribute these gypsum-based products to local builders.

And – of course - the local community has access to an additional source of drinking water for
60,000 people.

A register was tracked during the project construction and operational phase to document the percent
of local labour employment.

The second benefit is the increase in the number of people that now have access to clean drinking
water. The percentage of people without drinking water has been reduced from 14% to 2%, aiding the
provincial government in meeting one of its Millennium Development Goals to ensure that no household
goes without a potable, reliable and predictable water supply.

Potential for Scaling-up and replication of project

The project is currently being expanded into its second phase, which will increase output by 2013
from 30 Ml to 50 Ml a day, with a peak capacity of 60 Ml a day.

The site – and the project – has the potential for a third phase.

The project is replicable and is being examined by six of Anglo American’s ten Thermal Coal
operations.

It has already been replicated by a private mining company, Optimum Coal Holdings, who commissioned a
15 Ml a day plant in June 2010 to the east of eMalahleni. Four other projects in the Witbank
Coalfields are in various stages of project development based on the same model as the eMalahleni
plant.

Mines other than coal are also looking to replicate this model.

Considerable know-how has been developed as a result of this project with Anglo American recently
asked to provide input to government on a national desalination strategy.